March 31,2006

Grassley Expresses Concern Over Medicare Overpayments for Ambulance Services

WASHINGTON -- Sen. Chuck Grassley, chairman of the Committee on Finance, expressed
concern over a new report released today by the Office of Inspector General for the Department of
Health and Human Services (OIG) regarding overpayments made by the Medicare program for
ambulance services. The report highlighted overpayments made by Medicare to ambulance
providers that transport Medicare patients from hospital to hospital to receive specialized treatment.

These overpayments occurred as a result of ambulance providers billing the Medicare carrier
directly, when they should have billed the hospital that already received Medicare funds for this
expense. As a result, Medicare overpaid $21.7 million between 2001 to 2003 and Medicaid overpaid
more than $6.2 million. The OIG noted that neither the Centers for Medicare and Medicaid Services
(CMS) nor the Medicare carriers had in place a computerized system to detect the overpayments.

“These overpayments are a big problem for Medicare,” Grassley said. “When Medicare
overpays for service, it’s spending money that isn’t providing services for other beneficiaries. CMS
needs to take the recommendations of the inspector general to heart and prevent Medicare from
continuing to pay twice for the same service.”

The report will be available on the OIG’s website this afternoon.